Phytoplankton employ a variety of defence mechanisms against predation, including production of toxins. Domoic acid (DA) production by the diatom Pseudo-nitzschia spp. is induced by the presence of predators and is considered to provide defence benefits, but the evidence is circumstantial. We exposed eight different strains of P. seriata to chemical cues from copepods and examined the costs and the benefits of toxin production. The magnitude of the induced toxin response was highly variable among strains, while the costs in terms of growth reduction per DA cell quota were similar and the trade-off thus consistent. We found two components of the defence in induced cells: (i) a ‘private good’ in terms of elevated rejection of captured cells and (ii) a ‘public good’ facilitated by a reduction in copepod feeding activity. Induced cells were more frequently rejected by copepods and rejections were directly correlated with DA cell quota and independent of access to other food items. By contrast, the public-good effect was diminished by the presence of alternative prey suggesting that it does not play a major role in bloom formation and that its evolution is closely associated with the grazing-deterrent private good.